Keir Starmer to find a world ready for business with Labour

Britain's Rishi Sunak left his successor Keir Starmer a gift in the Downing Street diary.

A July 18 summit of European leaders at Blenheim Palace, the English countryside birthplace of Winston Churchill, gives Mr Starmer the chance to open a new era.

After the bitter Brexit years, Labour wants to show a friendlier face to the world and the 47-member European Political Community founded by France's President Emmanuel Macron will be a way to show goodwill.

With Mr Starmer also due at a Nato summit next week, the new government will get off to a “cracking start” in foreign policy, said former British EU commissioner Julian King.

“They have two big international events right at the start, which will be both a platform and an opportunity to set out their ambitions on foreign policy,” he said.

It “also will mean that there'll be a big focus, an uncommonly sharp focus for a brand new government, on what they say and what they do on foreign policy issues”.

But merely setting a more positive mood will not free Mr Starmer's Britain from complex global relations or the constraints of domestic politics.

Mr Starmer will want warm words to turn into hard investor cash and migration deals, if he is to meet promises to voters to repair the UK’s economy and secure its borders.

Labour’s stance on Israel will be under intense scrutiny from its pro-Palestine wing. Any sign of backtracking on Brexit risks alienating voters Mr Starmer has fought to win over.

And it takes two to have an appetite for friendly relations – at a time of resurgent nationalism in allied nations such as France and the US.

Labour’s team “have a good relationship with Macron and the Elysee [Palace], which will get a bit more complicated” after France’s snap election, said Mr King.

“Some of the individual European leaders will not necessarily be terribly sympathetic to working with a left-of-centre government in the UK,” he told The National.

However, the UK will be more willing to work with the EU’s central institutions and has allies in northern Europe and the Baltic states, giving it “a basis for trying to manage the relationship”, he said.

Trade and investment

What Labour calls the “first mission” in its manifesto is to boost Britain’s economic growth.

This reflects the fact that Labour will inherit a “very difficult fiscal position”, said Gavin Barwell, an adviser to former Conservative prime minister Theresa May.

“If they can’t get the underlying rate of growth higher, lots of unpleasant decisions flow from that,” Mr Barwell said in a briefing to businesses.

As a result, working with business and raising private funds is a key goal. Chancellor of the Exchequer Rachel Reeves is planning an international investment summit within 100 days.

Labour’s manifesto vows to deepen Britain’s trade and investment ties to the Gulf and push for a free-trade agreement with India.

It also promises to remove “unnecessary barriers” to trade with Europe but is reluctant to re-open wounds over Brexit.

A UK-EU fishing agreement is up for renegotiation in 2026 and electric car tariffs are scheduled to kick in 2027, inevitably bringing the debate back into view.

Keir Starmer through the years – in pictures

In contrast to hardline Conservatives forcing the UK to take a tough line with Brussels, some Labour backbenchers might apply pressure in the opposite direction, said Mr King.

“A Labour government will face pressure from some of its supporters to try to move closer, faster, towards the European Union,” he said.

At the same time, Labour will “want to build a solid coalition of support that might carry them through a lot of difficult domestic challenges … they have wanted to avoid frightening the horses”.

Conflict and migration

Britain’s overall policy on Gaza and Ukraine will not change much, at least for now.

Mr Starmer has been determined to repair Labour’s image after claims of anti-Semitism, and Russia sympathies, dogged its previous leader Jeremy Corbyn.

He says Labour will recognise a Palestinian state at some point during a peace process – a similar position to the Conservatives.

And it would be surprising if he did not make an early journey to Ukraine to show solidarity with President Volodymyr Zelenskyy.

Mr Starmer “is trying to send a message of reassurance, confidence, about Britain’s role in the world, in part to contrast with his predecessor,” Mr King said.

But “there are a group of Labour Party supporters who would like to see a more sympathetic position on Palestine, who would like to see faster recognition. Labour will have to work out how they manage that pressure”.

There will also be an “interesting contrast between a UK that could be returning to political stability, and the instability that you see politically right now in France”, noted Mr Barwell.

But any British gloating over that would soon be overshadowed by the difficulty in pursuing a new migration deal with a far-right French government.

With Labour set to scrap plans to deport failed asylum seekers to Rwanda, it is hoping a new deal with France will curb illegal migration across the English Channel.

It is “very unlikely” that a hard-right government in France “will be keen to help Britain solve the migration crisis”, said political professor and Labour watcher Eunice Goes. “That is going to be a very big challenge for the incoming government.”

Climate and tech

Labour's manifesto vows to “restore the strong global leadership needed to tackle the climate crisis” after Mr Sunak postponed some net zero targets.

A goal of using only clean electricity by 2030 is seen as a “stretch target” that could galvanise action even if it is not actually met.

Although Mr Starmer has scaled back plans for £28 billion ($35.53 billion) a year of green investment, new funding is promised for wind and solar power, hydrogen and carbon capture.

Chris Skidmore, the former Tory minister who symbolically signed Britain's net zero target into law in 2019, supported Labour on Thursday to back the green push.

The tech sector more broadly is interested in Labour's pledges to cap corporation tax, offer 10-year research budgets and relax rules on building laboratories and data centres.

Although Mr Starmer has not shown Mr Sunak's enthusiasm for artificial intelligence, Labour says it will bring in regulations to “ensure the safe development and use of AI models”.